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APPENDIX B
Summary of Conceded, Deemed Conceded, Computational,
and Settled Issues
The following is a summary of issues and/or adjustments
conceded, deemed conceded, of a computational nature, or settled.
The Income Tax Cases
I. Docket No. 9294-95, Cordes Finance Corp.:
A. 1991:
1. Respondent adjusted petitioner’s income for 1991
to reflect additional gross receipts of $355,200.
Petitioner concedes this adjustment.
2. Respondent adjusted petitioner’s income for 1991
by $37,505, pursuant to sec. 482, to reflect an
improper deduction for interest expense.
Petitioner concedes this adjustment.
3. Respondent readjusted petitioner’s reported bad
debt deduction for 1991 by $501,267 to reflect
actual realized bad debts for the taxable year.
Respondent concedes this adjustment.
4. Respondent determined petitioner used an incorrect
method of accounting for 1991 and readjusted
petitioner’s interest income by $859,338 to
reflect interest accrued under the accrual method
of accounting. The parties stipulated that the
final decision in Cordes Fin. Corp. v.
Commissioner, T.C. Memo. 1997-162, affd. without
published opinion 162 F.3d 1172 (10th Cir. 1998),
would decide the proper amount of petitioner’s
interest income for 1991. In accordance with the
parties’ stipulations, respondent concedes this
adjustment.
5. Petitioner conceded an increase in its interest
income in the amount of $16,600. This concession
does not appear to relate to any specific
adjustment in the notice of deficiency.
6. Petitioner claimed a net operating loss for 1994
and carried a loss back to 1991. Petitioner
concedes it was not entitled to claim a net
operating loss in 1994 or carry a loss back to
1991.
7. Respondent determined petitioner was liable for a
penalty for 1991 pursuant to sec. 6662(a) for
substantial understatement of tax. Petitioner
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